History of Key Performance Indicators
Management by Objectives
- Output = the past: KPI are, per definitions, numbers that are measuring an output. And here we have the first problem: there are some areas where just measuring the output (= something already happened in the past) is not enough.
- Input = Actions: many KPIs are focusing on just on results, but are not tracking the actions and efforts to get a results
- Short Terms: as KPI are tracking mainly output we want them to be as much as possible up to date and close to the event, that means with limited visibility to the future (but with lot of historical data to rely on)
- Cost Structure: the way we are elaborating production costs can deliver “wrong” message through the KPIs.
KPIs in Lean Production
- How much time an employee can dedicate to improve or to coach somebody else?
- How many coaches or trainers do we have in our department?
- How many events started from operators and not from supervisors pushing for them?
- How many training hours were dedicated to a specific topic?
10 golden rules for Lean KPIs
- Don’t stop at classic KPIs, be creative!
- Focus both on input and output
- KPIs are not forever – change them according organization’s culture and improvements
- Remember to track actions and activities, not only results!
- Don’t be slave of KPIs – culture’s shift is slower than numbers
- Learn to read beyond numbers
- Think in long-term
- Look at whole trend
- Measure things that are worth
- Don’t focus on money only – there are things that have no value!
Andrea Manti is CBDO at Lean Community. He has over 15 years of experience in Lean Management. He is an expert in Lean and Quality Management and has held positions working as a Process Engineer, Customer Quality representative, Quality System Manager (IATF standard), and Continuous Improvement Senior Manager. During his career, Andrea has led the implementation of several Lean/6Sigma projects, TPM workshops, and TWI activities. He is also an expert in the World Class Manufacturing (WCM) program